After years of financial losses, and months of unionization drama, Chicago-based Tronc is reported to be negotiating to sell the Los Angeles Times and San Diego Union-Tribune.
L.A.-based billionaire physician Patrick Soon-Shiong, a major shareholder in Tronc, is biding to buy that company’s ownership of both the Times and the Union-Tribune, according to the latter.
The Times-Mirror Company was purchased by Chicago’s Tribune Company in 2000. The philosophy of the paper quickly began reflecting its owner’s liberal bias, and California newsroom staff was slashed. The Chicago Tribune filed for bankruptcy in 2008, and the newspaper’s control went through several corporate raiders.
But Chicago activist hedge fund manager Michael Ferro took control of Tribune Publishing via a $44 million stock buy in Feb. 2016. He made himself chairman and claimed that by “leveraging artificial intelligence and machine learning to improve user experience,” he could turn the LA Times into a “global entertainment brand.” He renamed the company Tronc Inc., short for “Tribune Online Content.”
Ferro tried intended for the Times to consolidate the Southern California newspaper market by attempting to buy the Orange County Register, the region’s third major paper. But the Obama administration’s Department of Justice objected, and a federal judge blocked the deal on antitrust grounds. The Register was eventually sold to Denver-based Digital First Media.
The activists’ big plans fizzled financially. Cost-cutting and a digital push only made Tronc a $2.1 million profit last quarter, versus a loss of $10.5 million in the prior year-long period. Meanwhile, Times newsroom staff retaliated against cuts in a Jan. 19 National Labor Relations Board election by voting 248 to 44 unionize under the NewsGuild-Communications Workers of America.
The South African-born Soon-Shiong has been very vocal in his opposition to Ferro’s management style of cutting staff while utilizing lots of private jet travel and multi-million-dollar management contracts. Soon-Shiong is a very experienced corporate manager, having become a billionaire as the founder and chief executive of Culver City-based NantHealth.
Pew Research reported that U.S. newspaper circulation revenue has continued to rise over the last decade, to $10.9 billion, but advertising revenue has plunged from $55 billion to about $12 billion. Tronc does not break out what percent of its $1.4 billion in annual revenues include the Times and Union-Tribune newspapers, but Edmonds estimates that they make up about 35 percent of the company’s revenues.
Southern California is the nation’s second-largest newspaper market, and the Times claims to have 474,000 daily subscribers, 734,000 Sunday subscribers, and 37 million page views each month. But despite being 120 miles apart, there has been little effort at integrating the Union-Tribune and the Times.
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